Money

Europe should be wary of Biden’s cuddly capitalism

Judging by the European press’ reaction to his address to Congress this week, US president Joe Biden’s domestic agenda is popular outside of the United States as well.  ‘In the choice between going big and going bipartisan, big is winning, remaking America with government at the centre,’ the Guardian writes approvingly. Biden embarks on ‘a historic battle against inequality,’ a Le Monde headline announces. ‘America’s democracy can no longer endure the growing gap in income and education, so Biden has to fight for the middle,’ the Süddeutsche Zeitung piles on. Notwithstanding the president’s unassuming demeanour, there can be no question about the his ambitions. After the sizeable Covid-19 relief package, worth

Kate Andrews

One hundred days in, is Biden getting a vaccine boost?

Boris Johnson is set for a vaccine boost next week when local election results start rolling in. As James Forsyth explains in this week’s magazine, the vaccine rollout is forefront in voters’ minds, with seven out of ten now inoculated or even fully jabbed up. For all the chaos raging around Johnson, with accusations from his former allies and long-term opponents coming in thick and fast, the PM looks set to retain his support where it matters: at the polling station.  Can the same be said for Joe Biden? Across the pond, America is experiencing an equally successful vaccine rollout, as both the US and the UK hover around the top

The eurozone’s Covid recession has arrived

The US is booming. The UK is set to grow at the fastest pace in half a century. China is expanding again at a blistering pace. Stock markets are rising. And commodity prices are racing ahead.  Across most of the world, economists are starting to worry about a runaway boom, stimulated by too much easy money. This, they fear, could easily run out of control. There is one exception, however: the eurozone. As of today, the zone is officially in a double-dip recession. The vaccine downturn has arrived. And while the consequences remain unpredictable, one thing is clear: they won’t be good. The reality is that the eurozone was already the

Martin Vander Weyer

Who’s really to blame for the Post Office scandal?

The alleged frauds for which the Post Office prosecuted no fewer than 736 of its sub-postmasters has turned out in almost all cases to be the result of faults in a computer system called Horizon which Post Office managers and the system’s supplier, Fujitsu of Japan, were reluctant to acknowledge. That’s the short summary of a miscarriage of justice which also looks like a case of mismanagement to the point of delusion: how could anyone believe a copy-cat crime wave on this scale was sweeping through a cohort of small businesspeople generally seen as the most upstanding of local citizens? And if that wasn’t the belief, the only other explanation

Ross Clark

Will 95 per cent mortgages really help first-time buyers?

Did we end up learning anything from the 2008/09 financial crisis? If we did, we seem to have forgotten it pretty quickly again, to judge by the re-emergence of the 95 per cent mortgage. Numerous deals have been launched over the past week, with interest rates of around four per cent – the result of the Chancellor’s Budget initiative for the government to underwrite such loans. If you can sum up what went wrong in the late 2000s in one sentence it is that in their determination to grow their share of the mortgage market, banks overlooked that fact that it takes very little to turn a secured loan into an unsecured

Kate Andrews

Have we reached herd immunity?

When the Office for National Statistics released the last antibody survey a fortnight ago, the results were underwhelming. After watching prevalence in the population shoot upwards for months, the figure had plateaued at 55 per cent. There were several reasons suggested for the stall, including the move to giving second doses and difficulties detecting fading antibodies (which the ONS is quick to point out does not necessarily mean a person no longer has immunity). But, regardless, it raised concerns that it might take longer to reach high antibody prevalence rates than previously hoped. Thankfully, today’s update has provided plenty of cheer. In the two weeks following the last update (taking

Kate Andrews

Are plans to abandon the office premature?

To what extent will our pandemic lifestyles stick? With ‘work from home’ guidance in place for the best part of a year now, it’s has been assumed that trends towards flexible working are accelerating. Until the guidance formally shifts and employees have complete freedom to return to work, no one is quite sure what the demand to return — or stay home — will be. But the City of London is already preparing, as today the caretakers of the Square Mile announced their plans to convert empty offices into residences with the aim of creating an additional 1,500 homes by 2030. This is a sizable increase given there are only estimated

Can Boris finally ‘fix’ social care?

It’s been almost a year since Boris Johnson said he would not wait to ‘fix the problem of social care that every government has flunked for the last 30 years’. With a green paper detailing the government’s plan finally due, we’ll soon learn whether the Prime Minister is as good as his word. We’ll also see whether Johnson succeeds in avoiding the pitfalls encountered by his predecessors. Might he tumble into the same trap that blew up Theresa May’s bungled snap election? The wrecks of those previous attempts – sent out with such high hopes – are plentiful. Talking to the politicians in charge of those efforts from three different

The UK property boom looks set to continue

If there is one thing I have learnt from working in the property market for over 40 years it’s that any market prediction worth its salt takes into account the relationship between London and the regions. Sometimes the capital is a useful bellwether for the rest of the country but not always. In the early 2000s, the central London market was booming thanks to an influx of investment from abroad. Such was the popularity of London with foreign buyers that the property market bounced back quickly after the 2008 financial crash – this was as much because of exchange rates as interest rates, something simply not seen in the provinces. For various reasons,

Kate Andrews

When will vaccines begin boosting the economy?

Britain may be about to go from one economic extreme to another. This winter the OECD calculated Britain suffered one of the highest levels of economic damage in the developed world, compared with the year before, due to its stringent lockdown. Fast forward to spring and the UK’s trajectory for economic recovery is now being revised, with forecasts only moving in one direction: up. Today alone, two heavy hitters boosted their predictions. This morning EY Item Club revised its 2021 growth forecast from 5 per cent to 6.8 per cent – which, if accurate, would see the UK grow at its fastest rate on record, recovering to pre-pandemic levels months earlier

Boris’s football socialism

It was once my job to brief Boris on football. Then he was very much a free marketeer, now it is amazing to see that he wants to play the socialist sports lord, a task that defeated Tony Blair. The briefing took place on a Sunday afternoon in September 1998 when news emerged that Manchester United’s directors were planning to sell the club to Rupert Murdoch’s BSkyB. Boris had decided to devote his column to it. His problem was he did not know anything about the deal, or for that matter much about English football, and as the chief sports news correspondent for the Daily Telegraph, he rang me to

Ross Clark

What does the government’s green target mean for your money?

As if Covid hadn’t caused a big enough disruption to the economy and investors, along comes another shocker: the government’s announcement of an even-tighter target for reducing carbon emissions. Britain has now been put on a legally-binding commitment to reduce carbon emissions by 78 per cent on 1990 levels by 2035. What does it mean for your money? Quite a lot. For one thing it means that it is more likely that the government will adopt the proposal by the Committee on Climate Change to ban the sale of all homes by 2028 unless they achieve a ‘C’ rating in an Energy Performance Certificate. That potentially exposes millions of homeowners to

James Forsyth

The Super League collapse shows interventionism is back

What killed the European Super League? Undoubtedly part of it was the backlash from the fans. But the government’s threats to intervene were clearly a factor too. A super league where the six English clubs couldn’t get work permits for any overseas players would have quickly lost its appeal – and the government and the FA were clearly prepared to go down this route. Brexit had strengthened the government’s hand on this; freedom of movement would have meant that any footballer with an EU passport could have come and played for one of the Super League clubs. Football is clearly a special case. But the government’s willingness to intervene does seem

Wolfgang Münchau

The Brexit bounce is underway

The collapse in UK-EU trade after 1 January was widely reported. What has not been reported nearly as much is that UK exports have made a near-complete recovery. They were up 46.6 per cent in February after falling by 42 per cent in January. Imports are not there yet. They were up 7.3 per cent in February after a fall of 29.7 per cent in January. The one prediction I am happy to make is that they will recover too.  What these and other numbers are telling us is that even this bit of the Brexit scare stories will not come true. If you look at the latest IMF data

Kate Andrews

Have unemployment fears subsided?

Over the past few months, each labour market update from the Office for National Statistics has suggested forecasts predicting mass unemployment were wide of the mark. In the three months leading up to February, unemployment was estimated to hover at 4.9 per cent, 0.9 per cent higher than the previous year but down 0.1 per cent from the previous month. Where credit is due is debated – and likely shared. The jobs retention scheme continues to shield five million workers, who cannot yet return to their jobs, from unemployed status. That GDP has not taken anywhere near the same tumble this winter as it did last spring speaks to innovative

Which London suburbs are worth moving to?

Pre-pandemic, all you needed for a good London location was a roof terrace, proximity to a vibrant social scene and a tube station. Or a river view. Then everything changed. Whilst central areas have pretty much fallen into the doldrums, a combination of more room, better value and access to green spaces has become essential. If you had all the money in the world, you’d still locate around London’s greatest open green spaces. Hampstead Heath, Kenwood and Regent’s Park to the north, Hyde Park or St James’s Park in central London or Battersea, Richmond, Dulwich or Richmond to the south. For the rest of us, living in a shoe box with

Money to burn: shoppers, not the state, will lead our recovery

Compared with the United States, the UK has so far been relatively cautious about launching stimulus programmes to kick-start the economy. And yet perhaps it doesn’t need to. People are paying off their credit cards, putting some money into the stock market, buying new houses, as well as finally booking a restaurant and getting back to the shops. A lot of money is about to be unleashed on the economy, even if this stimulus is largely invisible now. The interesting question is this: where will all the money go, and which sectors will be the big winners? It may at times seem as if Rishi Sunak is spending like crazy.

Martin Vander Weyer

Can the ‘next Bicester Village’ take off without tourists?

Retail footfall will be the first measure of recovery this spring. Everywhere I look, from central London to small-town Yorkshire, shopkeepers who survived the winter cull have been dusting their counters, cleaning their windows — and waiting in their doorways for the crowd of customers who have accumulated £150 billion of savings during lockdown and, despite the cornucopia of online offerings, can’t wait to start browsing and shopping for real again. Indications were mixed at the beginning of the week, with numbers still down on pre-pandemic levels, but at least the stock market is buying the theory. The FTSE 350 General Retailers index, which includes the likes of Dixons Carphone, Dunelm,

Ross Clark

Britain is closing its trade gap with the EU

So it was just a blip after all. Remember those huge headlines last month revealing that exports to the EU had plunged by 41 per cent in January, leading frustrated remainers to bleat: we told you so? ‘Brexit – the unfolding disaster’ tweeted Lord Adonis for one, along with a graph showing the sharp fall in January. Now we have the figures for February, which has been reported rather less loudly, but which show just as strong a rebound. Exports in goods to the EU in February, records Her Majesty’s Revenue and Customs, were 56 per cent up on those in January. They are still down 11.6 per cent on February 2020, but

Kate Andrews

Is the UK taking advantage of its vaccine success?

UK GDP ever so slightly edged up in February, growing 0.4 per cent according to today’s update from the Office for National Statistics. No surprises here: there were no changes to lockdown restrictions between January and February, which gave the economy little room for manoeuvre. The ONS has revised January’s GDP fall from 2.9 to 2.2 per cent: still a contraction, but another good indicator that businesses have significantly adapted to lockdown rules, which has meant that this winter’s lockdown didn’t plunge GDP down to record levels as it did last spring. Still, February serves as another reminder that – despite spectacular market innovation – there is a ceiling on